Correlation Between O3 Mining and Nexa Resources
Can any of the company-specific risk be diversified away by investing in both O3 Mining and Nexa Resources at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining O3 Mining and Nexa Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between O3 Mining and Nexa Resources SA, you can compare the effects of market volatilities on O3 Mining and Nexa Resources and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in O3 Mining with a short position of Nexa Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of O3 Mining and Nexa Resources.
Diversification Opportunities for O3 Mining and Nexa Resources
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between OIIIF and Nexa is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding O3 Mining and Nexa Resources SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexa Resources SA and O3 Mining is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on O3 Mining are associated (or correlated) with Nexa Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nexa Resources SA has no effect on the direction of O3 Mining i.e., O3 Mining and Nexa Resources go up and down completely randomly.
Pair Corralation between O3 Mining and Nexa Resources
Assuming the 90 days horizon O3 Mining is expected to under-perform the Nexa Resources. In addition to that, O3 Mining is 1.23 times more volatile than Nexa Resources SA. It trades about -0.13 of its total potential returns per unit of risk. Nexa Resources SA is currently generating about -0.06 per unit of volatility. If you would invest 786.00 in Nexa Resources SA on August 29, 2024 and sell it today you would lose (21.00) from holding Nexa Resources SA or give up 2.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
O3 Mining vs. Nexa Resources SA
Performance |
| Timeline |
| O3 Mining |
| Nexa Resources SA |
O3 Mining and Nexa Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with O3 Mining and Nexa Resources
The main advantage of trading using opposite O3 Mining and Nexa Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if O3 Mining position performs unexpectedly, Nexa Resources can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Nexa Resources will offset losses from the drop in Nexa Resources' long position.| O3 Mining vs. Canstar Resources | O3 Mining vs. Benton Resources | O3 Mining vs. Prime Mining Corp | O3 Mining vs. Silver X Mining |
| Nexa Resources vs. Materion | Nexa Resources vs. Fury Gold Mines | Nexa Resources vs. Eskay Mining Corp | Nexa Resources vs. EMX Royalty Corp |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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